SA petrol price set to decline sharply next month

From October 2010 to May 2011 the SA petrol price rose by a dramatic R2.18c/litre or 27%; despite the relative strength of the Rand. This added to the upward pressure on SA inflation and started to erode the consumer’s discretionary spending power.

Fortunately, in June the international oil price has receded fairly significantly, dropping from a recent high of $121/bl on 14 June to around $105/bl currently. This has meant that the over-recovery on the petrol price has increased sharply to a daily rate 53c/l, with the average over-recovery for the month-to-date measured at around 30c/l. This means that the SA petrol price should fall sharply in early July 2011 by around 30c/l to 35c/l, providing some relief for consumers and helping to ease the current upward pressure on inflation.

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